Event: the company issued the 2023 semi-annual report: the company's revenue was 1.121 billion yuan, + 75.18% compared with the same period last year; the net profit returned to the mother was-40 million yuan, + 86.58% compared with the same period last year; and the net profit after deducting non-return was-41 million yuan, + 86.18% compared with the same period last year.
The revenue of Q2 company is growing rapidly, and the loss is narrowing compared with the same period last year. The improvement of 2023H1's performance is mainly due to the increase in the price of commodity generation chicken seedlings caused by the tight supply of Q1 chicken seedlings and the concentrated replenishment after the festival, as well as the improvement of the overall gross profit margin due to the expansion of the company's chicken cooked food conditioning business. H1 company's comprehensive gross profit margin is 15.48%, year-on-year + 40.95 PCT; period expense rate is 15.28%, year-on-year + 1.66pct. In a single quarter, the revenue of Q2 company was 543 million yuan, + 38.30% compared with the same period last year, the net profit was-97 million yuan, + 15.48% compared with the same period last year, and the net profit was-99 million yuan, + 13.18% compared with the same period last year. The loss is mainly due to the gradual decline of seedling prices to the loss range. The company's comprehensive gross profit margin is 4.73%, year-on-year + 14.89pct; period expense rate is 16.09%, year-on-year + 4.96pct, mainly due to a large increase in e-commerce business and a significant increase in sales expenses.
H1 company chicken seedling sales + 5%, gross profit margin improved significantly. 23H1 sold 140 million chicks, + 5.26% year-on-year, revenue of 487 million yuan, + 43.43% year-on-year, unit price of 3.48 yuan per chicken, + 106.40% year-on-year, and gross profit margin of 28.86%, year-on-year + 74.42pct. At present, the company's commercial chicken seedlings can produce more than 300 million birds. At the same time, the construction project of the company's Linyi incubator has been more than halfway, matching with the chicken breeding project, it will add 100 million pieces of commodity annual production capacity after operation, and serve nearby customers more efficiently, promoting the further growth of the company's performance. In addition, the company continues to promote 800000 sets of parent breeder breeding project, which has been partially put into production. The first batch of 110000 sets of parental breeder chickens raised in November 22 is expected to gradually produce chicken seedlings to supply the market in 23H2. In the aspect of breeding, the company adopts a variety of large-scale breeding techniques, such as multi-layer cage culture, "three-stage full-in and full-out", chicken semen dilution and so on, so as to improve the breeding efficiency.
The continuous expansion of cooked food business is expected to increase the production capacity of 60,000 tons of cooked food. 23H1 sold 35900 tons of chicken products, + 18.14% year-on-year; revenue of 521 million yuan, + 46.47%; unit price of about 14500 yuan / ton, + 40.13% year-on-year; gross profit margin of 4.64%, year-on-year + 21.82pct. In recent years, the company has increased its investment in cooked food business, constantly opening up new marketing channels and extending the industrial chain. The company's cooked food business mainly adopts the combination of traditional sales and e-commerce sales, complementary online and offline, has been sold in a number of e-commerce platforms, and continues to expand B-end customers offline. The company's two cooked food plants in Weifang and Minhe have been put into operation with a total production capacity of 60,000 tons. At present, efforts are being made to improve production and sales capacity, and the production and sales volume of 23H1 continues to increase. As the profits of deeply processed chicken deli products are relatively stable, or it will reduce the company's dependence on the profits of commercial chicken seedlings, it is expected to provide a more stable income.
Investment suggestion: with the breeding of parents and the sale of commercial chickens as the core, the company has established a circular industrial chain integrating broiler breeding, slaughtering and processing, and the development and utilization of organic wastes, and further develop the business of deep processing of cooked food. make up for the weak links in the middle and lower reaches of the industry, so as to obtain value-added profits in each link of the value chain. With the improvement of the prosperity of the white chicken industry, the company is expected to turn losses into profits. We estimate that the EPS from 2023 to 2024 will be 0.80,1.99 yuan respectively, corresponding to 19 times and 8 times of PE, maintaining the recommended rating.
Risk tips: the risk of animal epidemic; the risk of raw material price fluctuation; the risk of food safety; the risk of chicken price fluctuation and so on.